\u3000\u3 Bohai Water Industry Co.Ltd(000605) 338 Zhongyin Babi Food Co.Ltd(605338) )
Main points:
Event description:
The company released its annual report for 2021, with annual revenue of 1.375 billion yuan, a year-on-year increase of 41.06%; The net profit attributable to the parent company was 314 million yuan, with a year-on-year increase of 78.92%, which was caused by the change in the fair value of Eastroc Beverage (Group) Co.Ltd(605499) shares indirectly held; The non net profit attributable to the parent company was 152 million yuan, with a year-on-year increase of 18.01%. In 2021q4, the company achieved a revenue of 402 million yuan, a year-on-year increase of 25.99%; The net profit attributable to the parent company was 88 million yuan, a year-on-year increase of 21.54%; The non net profit attributable to the parent company was 51 million yuan, with a year-on-year increase of 17.50%. In addition, the company plans to distribute a cash dividend of 2.6 yuan (including tax) for every 10 shares, with a dividend rate of 20.54%.
Store sales: single store revenue is restored, and the pace of expanding stores is accelerated
Benefiting from the improvement of the supply price of some categories in the store and the unified management of the brand of the take away business in the store, the revenue of the company’s franchise single store in 2021 was 324000 yuan, with a year-on-year increase of 23.1%, and the revenue of single store has returned to the pre epidemic level. Meanwhile, in the past 21 years, the total number of franchised / directly operated stores of the company reached 3461 (year-on-year + 12%) / 19, with a net increase of 372 (year-on-year + 113.8%) / 2 respectively. In terms of sub regions, 2950 / 370 / 141 franchised stores were in East / South / North China, with a net increase of 215 / 101 / 56 respectively. Considering the room to improve the delivery coverage of stores in East China (currently about 50%) and the company’s gradual promotion of lunch and dinner products to extend the consumption scenario, we believe that the single store model will continue to improve. After the impact of the epidemic fades, the store sales business is expected to see a simultaneous increase in volume and price.
Group meal sales: channel intensive cultivation + capacity release, group meal business performed well
During the reporting period, Shanghai phase II intelligent plant project was put into operation, the company’s finished product capacity limit broke through, the group meal business developed rapidly, and the annual revenue was 215 million yuan, a year-on-year increase of 61.2%. In addition, the company set up a major customer business department in East China to optimize the organizational capacity and refine the sales channels, and subdivide the customers into five types: enterprise and institution group meal, catering supply chain, chain convenience store, chain catering brand and fresh e-commerce platform. We believe that with the combination of refined channel management and brand potential, there is considerable room to improve the market share of group meal business in East China, which may continue to increase in 22 years.
Prospect: acquisition and consolidation in Central China + Nanjing plant put into operation, and there is a bright future for the leader of Baodian
The epitaxial acquisition is progressing smoothly. The company quickly enters the central China market through “good gifts” and “early convenience”, and the national layout is the next city. In East China, Nanjing factory is expected to be put into operation at the end of the year. After the release of production capacity, the distribution of stores in Northern Jiangsu, Anhui, Zhejiang and other places will be increased and the expansion of group meal business will be enabled. As a leading enterprise of Chinese package point, the growth space of the company is worth looking forward to.
Investment advice
Under the background of steady growth, the demand for people’s livelihood is stable. Considering the simultaneous rise of volume and price at the store end and the high growth potential of group meals, the company’s business is highly uncertain after the improvement of the epidemic situation. Pork as the main raw material, the company will significantly benefit from the downward trend of pig price. The gross profit margin of 21q4 has recovered to 28.14%, and it is expected to return to normal level in 22 years. It is estimated that the company’s revenue from 2022 to 2024 will be RMB 1.766/21.43/2.585 billion, with a year-on-year increase of 28.4% / 21.3% / 20.7%. The net profit attributable to the parent company was RMB 256 / 314 / 378 million, with a year-on-year increase of – 18.5% / 22.6% / 20.4%, EPS of 1.03/1.26/1.52 and corresponding PE of 30.56/24.93/20.7 respectively, maintaining the “buy” rating.
Risk tips
The risk of sharp rise in raw material prices, food safety risk and lower than expected capacity construction
